Begin by inserting a 'CGT2 Event and Cost Base' worksheet for each capital gains event in the Capital Gains Events section of the Index. It is recommended that you change the title to the event's name so it can be easily recognised.
In the worksheet, complete the CGT event details section. The CGT event description is automatically selected from the name of the event on the Index. Dropdown menus are available for the CGT as set type and Which CGT event? fields. Where a capital gain is partially exempt (e.g. the client is eligible for the partial main residence exemption), enter the percentage that is subject to capital gains tax in row 24.
CGT discount for foreign/temporary resident individuals section
Discount testing period
Enter the discount testing period start date and end date in cells L207 and L208, noting the different scenarios below:
|Owner of the Asset||Discount testing period|
|Individual||The discount starting period starts on the day the individual acquired the asset and ends on the day of the CGT event.|
|Individual interest held in a fixed trust||The discount testing period starts on the most recent day the individual became a beneficiary of the trust and ends on the day the individual made the gain (generally the last day of the trust's tax year). |
|The individual is a beneficiary of a non-fixed trust and the relevant trust gain:||The discount testing period starts on the day of that acquisition and ends on the day the individual made the gain (generally the last day of the trust's tax year).|
|The individual is a beneficiary of a non-fixed trust and the relevant trust gain is referable (either directly or indirectly through one or more interposed trusts that are not fixed trusts) to a capital gain made by a fixed trust.||The discount testing period started on the most recent day that the trust whose capital gain is directly referable to the capital gain made by the fixed trust became a beneficiary of the fixed trust and ends on the day the individual made the gain (generally the last day of the year, for the trust of which the individual is a beneficiary).|
Answer the residency status questions in rows 211 - 212. If either of the answers to these questions were 'No', enter the dates that the individual was NOT an Australian resident during the CGT event period.
If the CGT asset was acquired before 8 May 2012 and the individual was a foreign/temporary resident on 8 May 2012, the discount percentage is calculated using the "apportioning method" unless the taxpayer chooses to use the "market value" method.
If you want to use the market value method, enter both the market value and the cost base of the CGT asset at 8 May 2012.
To calculate the cost base at 8 May 2012, you must assume a CGT event happened to the asset on that day (ITAA 1997 s 110-25(12)). This means you must account for all cost base modification as at 8 May 2012. For deductible expenditure, such as capital works deductions (special building write-off) on income producing buildings, you may need to exclude from the cost base the deduction claimed up to 8 May 2012. This will depend on the dates that the asset was originally acquired and the expenditure incurred.
The worksheet will compare the result under the market value method with the default calculation under the apportionment method and select the method that gives the greater discount. The CGT discount percentage will be transferred to the Index sheet.
|CGT1||CGT Checklist||Job Management|
|A01||Matters for Partner||Job Management|
|A02||Items Forward||Job Management|
|A05||Review Points||Job Management|
|A06||Client Queries||Job Management|
|A10||Matters for Client||Job Management|
|A13||Workpaper Items||Job Management|
|CGT2||CGT Event and Cost Base||Capital Gains Events|
|C28||SBE Aggregated Turnover||Capital Gains Events|
|J30||GST Margin Scheme||Capital Gains Events|
|Z01||Spare Worksheet - Blank||ALL|
|Z02||Spare Worksheet - List||ALL|